Solutions For International Financial Management, 14th Edition Madura All Chapters 1-21 complete

,1. The commonly accepted goal of an MNC is to:
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a. maximize short-term earnings. x@ x@


b. maximize shareholder wealth. x@ x@


c. minimize risk. x@


d. A and C. x@ x@


e. maximize international sales. x@ x@



ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
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STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Knowledge x@




2. With regard to corporate goals, an MNC is mostly concerned with maximizing
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, and a purely domestic firm is mostly concerned with maximizing
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a. shareholder wealth; short- x@ x@


term earnings x@


b. shareholder wealth; shareholder wealth x@ x@ x@


c. short-term earnings; sales volume x@ x@ x@


d. short-
term earnings; shareholder we
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alth
ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Knowledge x@




3. For an MNC, agency costs are typically:
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a. nonexistent
b. larger than agency costs of a small purely domestic firm.
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c. smaller than agency costs of a small purely dom
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estic firm. x@


d. the same as agency costs of a small purely domestic firm.
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ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.01
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Knowledge x@

,4. Which of the following could reduce agency problems for an MNC?
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a. stock options as managerial compensation
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b. hostile takeover threatx@ x@


c. investor monitoring x@


d. all of the above are forms of corporate control that could reduce agency proble
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ms for an MNC.
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ANSWER: d
DIFFICULTY: Moderate
LEARNING OBJECTIVES: INFM.MADU.15.01.01
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Comprehension x@




5. The valuation of an MNC should rise when an event causes the expected cash flows from foreign subsidiaries
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to
x@


and when the foreign currencies denominating these cash flows are ex
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pected tox@ . x@


a. decrease; x


@appreciat
e
b. increase; appreciate x@


c. decrease; x


@depreciat
e
d. increase; depreciate x@



ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.04
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Comprehension x@




6. Which of the following theories identifies specialization as a reason for international business?
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a. theory of comparative advantage
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b. imperfect markets theory x@ x@


c. product cycle theory x@ x@


d. none of the above x@ x@ x@



ANSWER: a
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Knowledge x@

, 7. Which of the following theories identifies the nontransferability of resources as a reason for international busine
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ss?
a. theory of comparative advantage
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b. imperfect markets theoryx@ x@


c. product cycle theory
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d. none of the above
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ANSWER: b
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Knowledge x@




8. Which of the following theories suggests that firms seek to penetrate new markets over time?
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a. theory of comparative advantage
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b. imperfect markets theory x@ x@


c. product cycle theory
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d. none of the above
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ANSWER: c
DIFFICULTY: Easy
LEARNING OBJECTIVES: INFM.MADU.15.01.02
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Knowledge x@




9. An industry based on which of the following would most likely take advantage of lower costs in some less
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developed foreign countries?
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a. assembly line productionx@ x@


b. specialized professional services
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c. nuclear missile programs
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d. development of more sophisticated comput
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er technology
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ANSWER: a
DIFFICULTY: Moderate
LEARNING OBJECTIVES: INFM.MADU.15.01.02
x@ x @


NATIONAL STANDARDS: United States - BUSPROG.INFM .MADU.15.03
x@ x @ x@ x@ x@ x@


STATE STANDARDS:
x@ United States - OH - DISC.INFM.MADU.15.02 x@ x@ x@ x@ x@


KEYWORDS: Bloom's: Application x@